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Solar tax credits called key to industry growth Schumer, to push for program changes

By August 21, 2015August 5th, 2021News

The following is an excerpt from an article that appeared in The Buffalo News on August 19, 2015.

Solar tax credits called key to industry growth

Schumer, at SolarCity site, to push for program changes

By Stephen T. Watson | News Staff Reporter

Jeff Tracy wanted to have solar panels installed at his City of Lockport home because he thought it would be good for the environment.

The project would have been out of his price range, however, if not for the array of tax credits and incentives available for solar energy projects.

“It sealed the deal,” said Tracy, an elementary school teacher, who said the credits and incentives will cut the $16,000 upfront cost of his installation to about $4,800.

Solar companies say the federal tax credit is essential to making residential and commercial projects economically viable, and they warn the loss of the credit would be a serious blow to the industry. Executives with companies that install solar panels on private homes and businesses across the area say incentives offered by federal and state governments are helping to wean this country off fossil fuels and are encouraging the use of renewable energy sources.

“We need every incentive available right now in order to promote the use and adoption of solar energy,” said Adam Rizzo, president of Solar Liberty, an Amherst-based installer of solar energy systems that put in Tracy’s panels.

That’s why U.S. Sen. Charles E. Schumer held a news conference Wednesday to call for an extension of the federal solar tax credit program and a change in federal regulations that would let homeowners and businesses take advantage of the tax credit sooner.

The 30 percent federal solar investment tax credit is set to expire for residential projects in 2016 and to fall to 10 percent for commercial projects.

 

The New York Democrat said extending the tax credit and letting residents and companies receive the tax benefits as soon as a project begins, instead of waiting for it to be completed, would encourage long-term investments in solar energy, provide certainty for solar customers and boost sales for solar companies.

“That tax credit really helps make solar panels worthwhile,” Schumer said Wednesday.

Surging sales

Solar installations are surging nationally and across New York.

Statewide, solar energy capacity quadrupled from 2011 to 2014 and, by the end of last year, New Yorkers had installed enough solar energy-generating capacity to meet the needs of 51,000 homes, according to a report released last month by New York State Energy Research and Development Authority, or NYSERDA.

The vast majority of that solar activity is downstate, however, where higher energy costs make solar a more attractive alternative. While NYSERDA reported that the amount of electricity generated from solar energy tripled in Western New York over the last three years, the 1,390 solar installations completed in the eight local counties to date account for just 5.5 percent of the installations statewide.

Costs dropping

Solar installations have steadily declined in cost in recent years. System costs fell by 8 percent last year and have declined by 49 percent since 2010, according to the Solar Energy Industries Association, a national trade group.

But, incentives remain an important part of the equation.

In addition to the federal solar investment tax credit, New York offers its own tax credit worth 25 percent of the cost of the installation, for a maximum of $5,000, for residential projects, as well as a total of $1 billion in incentives for larger-scale solar projects through its NY-Sun initiative.

“Customers that want to go solar, they want to know that that tax credit will still be in place by the time their project is finished,” said Solar Liberty’s Rizzo, who started the company with his brother, Nathan, in 2003.

Schumer wants to see changes in the federal program, and take the uncertainty out of tax credits.

New York’s senior senator said the current rules act as a disincentive for solar companies and customers because they aren’t guaranteed a tax credit until a project is “placed in service,” or completed. He is proposing legislation that would allow the solar tax credit to follow the same rules as a wind energy tax credit, which kicks in soon after construction begins on a wind project.

Schumer, said he’ll push in Congress for the extension and for the change in regulations.

Tracy said he expects his solar array to pay for itself within five years. The panels on the roof of his two-bedroom ranch in Lockport are visible from the street, and he’s had passing strangers stop, if he’s in the front yard, and get out of their cars to ask him about solar energy.

“I tell them, ‘You gotta get on this. The incentives are going away. Get the ball rolling,’ ” he said.